SEPC records ₹220.3226 crore promoter support after attachment

SEPC Limited recognised ₹220.3226 crore of support from promoter Mark AB Capital Private Limited in the quarter and half year ended September 30, 2026, after its bank accounts were attached. The 0.1% unsecured funding, due as a December 2035 bullet repayment, resulted in a reported ₹121.1554 crore deemed capital contribution to Other Equity.

Why did SEPC receive promoter support during the account attachment?

SEPC received the ₹220.3226 crore support because Mark AB Capital directly settled obligations while SEPC’s bank accounts were under attachment. The company said the settlements covered vendor dues, employee salary arrears, statutory liabilities, payments to lenders, and legal and other obligations during the quarter and half year ended September 30, 2026.

The attachment arose from proceedings connected with international arbitration initiated by GPE (India) Limited and others before the Singapore International Arbitration Centre against Twarit Consultancy Services Private Limited and SEPC. SEPC said the matter was settled with no financial impact on it, and the Madras High Court directed withdrawal of the account attachment on September 30, 2026.

The disclosed mechanism was direct settlement by the promoter rather than payments routed through SEPC’s restricted accounts. This matters because the funding was recorded as financial support and an unsecured obligation, while its disclosed uses spanned operating liabilities, staff arrears, statutory payments and lender obligations.

What are the terms of SEPC’s promoter funding?

SEPC’s ₹220.3226 crore promoter funding carries interest at 0.1% a year and is repayable in December 2035. The full principal and accrued interest are payable as a bullet amount, meaning the filing does not specify interim principal repayments before the maturity date.

SEPC said the unsecured loan is not repayable on demand, and the promoters confirmed it will not be recalled before its due date. The promoters also agreed that their claims will rank subordinate to those of SEPC’s banks and other creditors, placing the promoter’s repayment claim behind those creditor groups.

The promoters provided a letter of support for at least 12 months from approval of the financial results on November 11, 2026. SEPC’s management and board cited that support, along with positive net worth, cash profits, ongoing operations, the order book and expected cash flows, in preparing the September 30, 2026 financial statements on a going-concern basis.

How did SEPC account for the December 2035 loan?

SEPC measured the repayment obligation at a present value of ₹95.05 crore by discounting the December 2035 cash flows using its applicable cost of capital. The company applied Indian Accounting Standards, or Ind AS, to a loan whose face value, interest rate and long maturity differ from a conventional current-period borrowing.

SEPC reported ₹121.1554 crore as a deemed capital contribution from Mark AB Capital, credited directly to Other Equity. The filing describes this amount as the difference between the ₹220.3226 crore face value and the ₹95.05 crore present value, and says the treatment complies with applicable Ind AS requirements.

The figures printed in the note do not arithmetically reconcile: subtracting the stated ₹95.05 crore present value from the ₹220.3226 crore face value gives ₹125.2726 crore, rather than ₹121.1554 crore. SEPC did not provide a further reconciliation in the disclosed note, so the reported deemed contribution should be read as the company’s stated accounting amount.

The standalone cash-flow statement separately recorded a ₹2.3137 crore gain on initial recognition of an unsecured loan for the half year ended September 30, 2026. That item is distinct from the ₹121.1554 crore direct credit to Other Equity, and the filing does not equate the cash-flow adjustment with the deemed capital contribution.

What do SEPC’s latest results indicate about cash and liabilities?

SEPC reported a standalone net loss of ₹87.7374 crore for the half year ended September 30, 2026, after a ₹119.5699 crore deferred-tax-asset charge-off. The company described the charge-off as a non-cash accounting adjustment on deferred tax assets due to expire by the end of the current financial year, while reporting earnings before interest, tax, depreciation and amortisation of ₹54.8883 crore.

Operating cash outflow narrowed to ₹47.4945 crore in the half year ended September 30, 2026 from ₹148.0404 crore in the corresponding 2025 half year. Financing activities generated ₹49.2152 crore, down from ₹157.6928 crore a year earlier, while cash and cash equivalents rose to ₹37.3479 crore at September 30, 2026 from ₹18.2249 crore at September 30, 2025.

SEPC’s standalone total equity was ₹1,914.1856 crore at September 30, 2026, compared with ₹1,880.458 crore at March 31, 2026. Other Equity remained negative at ₹31.3278 crore, but improved from negative ₹62.8648 crore over the same period; the movement followed the promoter contribution and the half-year loss, among other reported changes.

What unresolved matters remain in SEPC’s financial results?

SEPC’s statutory auditor retained qualifications over deferred tax assets and overdue balances on stalled or disputed projects in the September 30, 2026 review. The auditor said it lacked sufficient appropriate evidence supporting management’s assessment that ₹91.6342 crore of deferred tax assets can be used against future taxable profits.

SEPC carried ₹90.3798 crore of overdue non-current contract assets, net of a ₹10.3637 crore provision, at September 30, 2026. It also disclosed ₹57.4257 crore of overdue non-current trade receivables, net of a ₹5.045 crore provision; these balances relate to projects delayed by regulatory approvals or disputes, and one customer is undergoing liquidation.

Management said it was confident of recovering the relevant project balances based on customer negotiations and asset realisability. It also said it expects to utilise the ₹91.6342 crore deferred tax asset before the applicable expiry periods, based on the potential order book, projects in the pipeline and future business plans, while the auditor’s qualification remains in place.

Conclusion

SEPC’s disclosed promoter support provided a route to settle ₹220.3226 crore of vendor, employee, statutory and lender-related obligations during the account attachment, with repayment set for December 2035 at 0.1% interest. The funding also increased reported Other Equity through a ₹121.1554 crore deemed capital contribution, although the present-value arithmetic in the note is not fully reconciled.

The next developments to watch are the promoter’s support commitment lasting at least 12 months from November 11, 2026, management’s ability to use the ₹91.6342 crore deferred tax asset before expiry, and resolution of the auditor-qualified overdue project balances. SEPC also disclosed that lender and other regulatory approvals remain required for its proposed 90% acquisition of Avenir International Engineers and Consultants LLC, despite shareholder approval on August 5, 2026 and stock-exchange approval on November 6, 2026.